Gift Gone Wrong

Date: 25 Jan, 2018| Author: Fred Streiman

Elsewhere on our website we have described the 3 essential ingredients for a legal gift.

1. An intention to make the gift
2. An actual acceptance of the gift
3. An actual delivery of the gift

In the tragic case of Teixeira, a decision of the Ontario Court of Appeal, we have a gift that just fell short of the finish line.

Mr. Teixeira had, for 15 years been the ultimate good neighbour to Mary. Shortly before Mary died she made a will leaving $100,000.00 to her neighbour. She also wanted to give him a $100,000.00 gift and wrote out a cheque which was delivered to Mr. Teixeira. Mr. Teixeira went to the bank and the bank placed a hold on the cheque. Before the cheque could be negotiated, Mary died.

What actually had occurred was that the specific account that Mary had written the cheque on was $19,000.00 short. Mary had other funds in the bank, more than sufficient to cover the cheque but the bank needed her authority to cover the shortfall in the account. In the end, the bank refused to honour the cheque and Mr. Teixeira sued Mary’s estate.

Mr. Teixeira lost at trial and then lost again on appeal.

The first two steps set out above had been met but the final step of an actual delivery never occurred. Not until the cheque was placed into Mr. Teixeira’s account and the funds had cleared, would there have been an actual delivery and accordingly a completion of the gift.

One area that was not canvassed in the case was whether or not M. Teixeira had a claim of negligence against the bank itself. Did the bank contact Mary prior to her death to advise her that the specific account upon which the cheque had been written was short of funds and sought her authority to transfer enough money so as to permit the cheque to be honoured?

This case is an excellent illustration of the 3 factors that are necessary for a valid gift.